Irvine Housing Blog

The world economy is not the next domino to fall.  The giant emerging markets (BRIC) will continue to grow & push the prices of commodities (oil might have some speculative money on top, but demand is still rising).  However, Europe’s periphery countries can’t pay their debts.  There will be massive financial turmoil in Europe which will push investors into…US treasuries - with our without a pseudo-default from debt-limit chicken.

What, to me, differentiates Florida’s FCBs from seemingly Irvine’s, is that Florida’s FCBs are buying properties there for personal & family use.  A condo in FL close to the beach is a huge resource to Canadians.  If you’re paying all or mostly cash, and it’s something you’ll use, and don’t need the money out, you hang onto it.

“many years before normal, income-induced appreciation takes over.”

How much income-induced appreciation is actually currency devaluation, (inflation), and not any sort of appreciation in either value or real price?

Six months ago, in the middle of the bear market bounce, Gary Shilling forecast that house prices would drop ANOTHER 20% nationwide. At the time he was scoffed at. People forgot that has one of the most accurate forecasting records of any economist in the world over the past 25 years.

Irvine house prices remain over valued and could easily drop 20% from here and possibly as much as 30%. Given the amount of shadow inventory in the system, I’m sticking with my 2013 to 2014 time frame for a bottom.

@IR:

Builders are successfully building and selling homes in Las Vegas and obtaining a 25% premium for their efforts. They aren’t building in large numbers like before the crash, but they are successfully exploiting the market niche that wants new and is willing to pay for it.

C’mon… you’re showing your Las Vegas bias now. Irvine sells hundreds (actually near a thousand) of new homes last year and you nitpick the numbers based on your data saying they didn’t sell as much as they claimed.

But here you are dropping plaudits on new home sales in Vegas? How many new homes did Las Vegas sell in 2010?

And let’s put the shoe on the other foot. Since now some are claiming that the intervention is becoming ineffective (and let me remind you that this intervention was supposed to never happen the first place) and prices will now continue to drop, what is going to happen to those places that are near bottom already? Is it still smart to buy anywhere (not just Irvine) if depreciation is still another 30%? If Irvine drops 30% (as Nick thinks), what does that mean for Aliso Viejo or other South County cities? Because surely, anyone who is willing to substitute Aliso now at $600k would wait for Irvine $850k homes to hit that same price (and what would that $600k Aliso home end up at?).

Honestly, I would like to see lower prices in Irvine… I’m just worried about what that would do to other cities. And the bigger question… wouldn’t that mean the gov would just step in again?

They’re already stepping in and using low rates to attract potential buyers
The FED knocked down the 10-Year to under 3%

Right the medians down from the tax credit.

Why dont we just take a look at this example today.

2 years later this listing is down 3.9% from mid 2009.  Mid 2009 is after folks like you realized the world was not in fact coming to an end.

This listing is probably on par with jan 2009 pricing.

Well at the time folks like you said a crash was immenent for Irvine.

2.5 years later and this listing is at the same market price.  Are we all supposed to be shocked and amazed by this?  Reality is Irvine prices did not crash since Jan 2009 - deal with it.

I do not keep track of all of OC, but the price per square foot in Coto de Caza is the lowest it has been in at least eight years.  I use eight years because my records only go back that far, but my suspicion is that ppsf has not been this low for much longer.

http://www.cotohousingblog.com/?p=16464

Be prepared for shock and awe, all you Irvine-is-so-special folks.  Irvine has a “failed” village on it’s hands.  Laguna Altura.  There’s lots of hand wringing and nervous tics appearing in the 550 building on Newport Center Drive, even executives announcing the panic in industry meetings.  And when this one tumbles, so does Stonegate, Woodbury, and the rest.

You can’t teach a pig to sing.  LagAlt is an island, remote and cut off from Irvine.  There is no “there”, there.  One small pool area for 600 families?  No parks, nothing to call “community”.  All folks who want to enter or leave will have to risk their lives on Laguna Canyon Road and the conga line of SUV’s at the gate in the morning to take the kiddies on a 10 mile ride to very remote schools will be killer.  The floorplans are only the beginning.  They simply tried to cram too much density into a small space.

LagAlt should be “LagAltDElete”.  It’s impossible.  Everything that could be done wrong was done wrong.  Back in the 80’s, IP tried to pull plans off the shelf and plug them into every community.  Fortunately, a few of the marketing guys saved the bacon then which led to some more innovative design.  Now they’re back to square one.  The site plan, as it now exists will create a virtual sea of garage doors, back yards of 10 feet (if that) and all the floor plans are virtually the same….just slightly larger rooms in the larger product.  With 1.7% and 1.8% tax rate on the smaller homes and 1.6% on the larger, plus $295 HOA fees…..have they not realized that buyers actually have to qualify on actual income?????

Ya’ll just move to Austin like I did six years on and be done with California. We got eht jobs, we have the infrastructure and every house on my block has appreciated more than 10% every year since I arrived. YES.

b tuck~not sure what “eht” jobs are, but by Texas state law mortgage loans (except for FHA/VA) must have 80% equity….no HELOC problems, no home ATM’s….

Someone tell me why prices won’t fall past their fair value—based on price-rent ratios—and keep falling? Prices got too high, because of stupidity. They can get too low because of stupidity, too.